Understanding and providing competitive employee benefits is essential for companies operating in Vietnam, especially in a competitive labor market. This article summarizes the most common types of employee allowances and benefits in Vietnam, based on current labor laws, tax regulations, and HR practices. It helps you make informed decisions and optimize compensation packages in line with local standards.
Compulsory benefits
When designing a benefits package (C&B) for employees in Vietnam, there are benefits required by law that every company must provide to their employees. These are minimum legal requirements, including full insurance, annual leave, public holidays, and mandatory health check-ups.
Bảo hiểm xã hội
Vietnam’s social security system includes mandatory contributions from employers and employees. These contributions encompass social insurance, health insurance, unemployment insurance, occupational accident and disease insurance, and union fees.
| Insurance Type / Fee | Employers | Employees |
| Social Insurance (SI) | 17,5% | 8% |
| Health Insurance (HI) | 3% | 1,5% |
| Unemployment Insurance (UI) | 1% | 1% |
| Occupational Accident and Disease Insurance | 0,5% | – |
| Union Fee | 2% | – |
| Tổng cộng | 24% | 10,5% |
Annual Leave
Employees with 12 months of service are entitled to at least 12 days of paid annual leave. Additionally, for every five years of continuous service with the same employer, employees receive one extra day of annual leave. Employers are responsible for scheduling annual leave in consultation with employees and ensuring full payment during these leave periods.
Public Holidays
Employees in Vietnam are entitled to fully paid leave on official public holidays, which include:
- New Year’s Day (January 1)
- Lunar New Year (Tet) (5-9 days)
- Hung Kings’ Commemoration Day
- Reunification Day (April 30)
- International Labor Day (May 1)
- National Day (September 2)
If an employee works on these public holidays, they are entitled to at least 300% of their regular wage for the hours worked. Adhering to these regulations not only ensures compliance with labor laws but also contributes to a positive and respectful workplace environment.
Annual Health Check-ups
Annual health check-ups are a legally required benefit in Vietnam and form a core part of employee welfare and occupational safety programs. Employers must organize regular health screenings for all employees, with more frequent checks required for vulnerable groups such as female workers, older employees, and those in hazardous environments.
These medical examinations help prevent health risks and promote workplace well-being. Costs for health check-ups are fully tax-exempt for employees and are considered a business expense for employers. Many companies also offer extended check-ups or family coverage as part of enhanced wellness packages.
Not compulsory benefits
These are non-mandatory benefits that employers are not legally required to provide under Vietnamese labor law. However, they have become common practice in the local market and are widely adopted by competitive employers. Offering such benefits can give your company a strategic advantage in attracting and retaining the right talent in today’s evolving workforce.
Industry common practice
13th Month Salary
The 13th-month salary is one of the most widely adopted benefits in Vietnam, often paid at the end of the calendar year or right before the Lunar New Year (Tết) as a financial incentive and gesture of appreciation. Some companies pay this when the employee completes a full 12 months of work. Although not mandatory by law, many companies include it in employment contracts or reward frameworks based on performance and business results.
The 13th-month salary is considered a bonus and is subject to personal income tax under Vietnam’s PIT law. Common practice shows that the bonus amount is usually set at one month of gross salary for one full year of work (prorated at the payment time), but the company can set a lower or higher amount depending on its policy and budget.
Lunch Allowance (Mid-shift Meals)
Lunch allowances, commonly referred to as mid-shift meals, are provided to cover employees’ meal expenses during working hours, particularly in industries like manufacturing or customer service where continuous shifts are required. Under the law provision, the maximum tax-free cash benefit is VND 730,000 per month per employee.
If the allowance is provided in kind (e.g., meals or canteen service), it is fully exempt from personal income tax. To optimize tax benefits and support employee well-being, many companies offer between VND 700,000 and 730,000 per month.
Transportation Allowance (Daily Commute)
The transportation allowance covers daily commuting expenses between an employee’s home and the workplace, which can be substantial in major cities like Ho Chi Minh City or Hanoi. Although there’s no fixed tax-free limit, the law allows tax exemption for reasonable amounts that are job-related and properly documented through labor contracts or company policy. This benefit is especially valued in roles requiring daily physical presence.
Common amounts range from VND 500,000 to 1,000,000 per month, based on actual travel costs and company budget.
Phone Allowance
Phone allowances support employees in roles where frequent business communication is essential, such as sales, customer service, or management positions. This benefit can be tax-exempt if it serves business purposes and is supported by internal documentation such as company policies or mobile phone bills.
Companies often tailor the allowance to specific roles and communication needs. The typical range is from VND 200,000 to 500,000 per month, depending on the nature of the job.
Travel allowance
Travel allowance is a form of financial support provided by employers to cover expenses incurred by employees during overnight business trips. These expenses typically include:
- Accommodation: Hotels, guesthouses, or other forms of lodging.
- Meals and beverages: Daily meals consumed while on assignment.
- Transportation: Airfare, taxis, buses, or rental vehicles.
- Incidental expenses: Parking fees, tolls, or communication costs.
This allowance is not part of the employee’s base salary, but rather a separate benefit that may be paid in advance or reimbursed after the employee submits a cost report.
Depending on company policy, travel allowances are structured in various ways. The most common types include:
- Fixed Travel Allowance: Employees receive a set amount per business trip, regardless of the actual expenses incurred. If actual spending is less, the employee retains the difference; if more, the excess is covered personally. This approach is suitable for short or infrequent business trips.
- Daily Travel Allowance (Per Diem): A daily allowance to cover meals, lodging, and other incidental costs. Receipts or expense reports are typically required. Depending on the policy, employees may be allowed to keep unused amounts or be required to return them.
- Reimbursement-Based Allowance: Employees cover expenses upfront and are reimbursed based on submitted receipts. This method ensures reimbursement for eligible expenses only but may involve longer processing times.
- Mileage Allowance: This applies when employees use personal vehicles for work-related travel. The reimbursement is calculated based on distance (kilometers or miles) using a fixed rate defined by company policy or applicable legal guidelines.
Good-to-have Allowance
Uniform Allowance
Uniform allowances help employees purchase and maintain required work uniforms, which are common in sectors like production, hospitality, and retail. According to the law, uniform support is tax-exempt if provided in kind, or up to VND 5,000,000 per year if paid in cash. Any amount exceeding this threshold is subject to personal income tax.
In practice, businesses usually provide between VND 4,500,000 and 5,000,000 per year to remain within the tax-exempt limit while meeting employees’ actual needs.
Internet Allowance
As remote and hybrid work models become more common in Vietnam, internet allowances have emerged as a practical support measure. This benefit helps employees maintain stable internet connections for work-related tasks, ensuring productivity and smooth communication. While there is no legal requirement to offer this allowance, many companies choose to provide it to support remote working arrangements.
The typical allowance ranges from VND 200,000 to 500,000 per month, and it may be subject to personal income tax unless classified under business-related reimbursements with proper documentation.
Holiday Wellness Programs
Holiday wellness programs are a creative way for companies to promote employee health and morale during festive periods or as part of an annual care initiative. These programs may include wellness vouchers, spa treatments, or general health check-ups, and are sometimes combined with team-building activities or company retreats.
If provided as in-kind services or company-organized events, they may be considered non-taxable; however, cash or voucher formats may be subject to PIT. The budget for these programs typically ranges between VND 1,000,000 and 5,000,000 per employee, depending on the company’s resources and culture.
To stay competitive in the market
Company Trips as Performance Rewards
Company-sponsored trips are a popular benefit in Vietnam and are often used as both a team-building activity and a form of reward for employee performance. These trips, typically organized once or twice a year, contribute to improved team cohesion, motivation, and employee engagement.
While not required by law, they are common in industries such as IT, finance, and hospitality. If the trip is arranged and paid for by the company as part of an internal event, it is generally not taxable for employees; however, cash bonuses for travel purposes may be subject to PIT. Budgets for these trips vary widely, often ranging from VND 5,000,000 to 20,000,000 per person.
Private Healthcare Plan (Insurance)
Private healthcare plans are medical insurance packages provided either by employers as part of an employee benefits scheme or purchased individually. These plans complement public healthcare systems by offering quicker access to specialized treatments and a wider choice of medical services.
Coverage typically includes inpatient and outpatient treatment, cancer care, mental health support, and in some plans, dental or vision benefits. However, most policies exclude pre-existing conditions, chronic illnesses such as arthritis or diabetes, and elective treatments like cosmetic surgery.
Premiums vary based on the insured’s age, location, and level of coverage, and plans can often be customized to individual or family needs. Policyholders pay monthly or annual premiums and submit claims for eligible treatments.
While private health insurance offers greater flexibility, it is not a full replacement for social security. Employees and employers should carefully review policy terms to understand what is and isn’t covered before committing to a plan.
Project Bonus
A project bonus is a financial reward paid to employees upon the successful completion of a specific project or the achievement of defined targets. It is a common performance-based incentive used to boost motivation and recognize contributions.
The structure can vary—it may be a fixed amount or calculated as a percentage of salary, and is usually tied to measurable individual or team performance. Eligibility depends on the employee’s role and involvement in the project, with different industries applying varying levels of access and reward structures.
Project bonuses are generally considered taxable income under most tax regulations. While they can significantly enhance engagement and productivity, they may also introduce pressure if expectations are not managed. To ensure fairness, bonus criteria and distribution methods must be transparent and well-communicated.
Work Equipment Benefits
Work equipment allowances refer to the provision of essential tools such as laptops, monitors, keyboards, and other peripherals to support employees in performing their job duties effectively. This benefit has become especially relevant in the era of remote and hybrid work, where access to appropriate technology directly impacts productivity and health.
In Vietnam, while there are no specific tax exemptions for this allowance, providing equipment can be considered a business expense and may be deductible for corporate tax purposes if it is justified as necessary for work. Employers must also comply with the Labor Code 2019, which requires providing safe and hygienic working conditions—this includes minimizing health risks from long hours at computer workstations.
Summary Table of Common Employee Benefits in Vietnam
| Category | Benefit | Description / Key Notes | Typical Practice / Range |
| I. Compulsory Benefits | Bảo hiểm xã hội | Includes SI, HI, UI, Occupational Accident Insurance, and Union Fee | Employer: 24%, Employee: 10.5% |
| Annual Leave | 12 days/year minimum, +1 day every 5 years of working experience with the company | Paid leave, flexible policies are common | |
| Public Holidays | National holidays (e.g., Tet, April 30, Sept 2) | Fully paid; 300% pay if worked | |
| Annual Health Check-ups | Annual medical checks for all employees | Often expanded to family or wellness plans | |
| II. Industry Common Practice | 13th Month Salary | Bonus paid before Lunar New Year | 1 months’ salary or based on company’s policy |
| Lunch Allowance | Mid-shift meal support | VND 700,000–730,000/month | |
| Transportation Allowance | Commute support, especially in cities | VND 500,000–1,000,000/month | |
| Phone Allowance | For employees requiring frequent calls | VND 200,000–500,000/month | |
| Travel Allowance | Business trip expenses (accommodation, food, transport) | Fixed, per diem, or reimbursement-based | |
| III. Good-to-have Allowances | Uniform Allowance | Cost support for required uniforms | Up to VND 5,000,000/year (tax-free) |
| Internet Allowance | For remote/hybrid workers | VND 200,000–500,000/month | |
| Holiday Wellness Programs | Wellness/spa/health packages during holidays | VND 1,000,000–5,000,000/employee | |
| IV. Competitive Edge Benefits | Company Trips | Team-building and performance reward trips | VND 5,000,000–20,000,000/person |
| Private Healthcare Plan | Enhanced medical coverage | VND 5,000,000–20,000,000/year | |
| Project Bonus | Performance-based reward on project completion | Fixed or % of salary, taxable | |
| Work Equipment Benefits | Provision of laptops, monitors, etc. | Based on role and need, company-managed |
Design and manage your C&B package with Iris International
Designing a compensation and benefits (C&B) package should be aligned with your company’s financial capabilities, industrial practice, and operational goals. An effective C&B strategy ensures legal compliance while also helping companies attract and retain top talent in a competitive labor market.
Offering extra benefits like meals, bonuses, or health plans boosts your company’s appeal and helps attract top talent beyond basic compliance. A strong benefits plan helps employers control costs, reduce disruptions, and proactively manage workforce needs beyond basic legal compliance.
At Iris International, we provide comprehensive HR support—from recruitment, HR management, contract/document drafting to customized C&B consulting—tailored to your company’s capacity, business model, and industry practices in Vietnam. Our team understands the nuances of local labor law and international expectations, ensuring your benefits framework is both compliant and competitive.
If you’re preparing to design or revise your company’s C&B package, contact Iris International today for a free consultation with our expert consultants. We’re here to help you build a workforce strategy that supports sustainable growth and long-term success in Vietnam.
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